Microsoft’s Discord Acquisition: A Mouth-Watering Prospect to Bolster Gaming Services

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The possibility of Microsoft acquiring discord is making rounds on the internet.

With all the possible acquisition deals that have taken place recently, more often than not, Microsoft’s name has been one that has kept doing the rounds.

Now with the recent news that has broken out, looks like Microsoft has got another possible deal to splurge its cash on!

According to the latest media reports, Discord, a popular instant messaging and digital distribution platform, has reportedly approached Microsoft for exploring the possibility of a sale that could top $10 billion.

According to people in the know, Discord has been putting out the feelers for a possible sell-off to multiple suitors for quite some time. The zeroing in on Microsoft as a potential buyer is primarily said to be centered on the Washington-based giant’s shoring up of its gaming business with some head-turning recent deals.

A deal between the parties is said to be imminent, seeing as talks were being held with Microsoft Xbox chief Phil Spencer to gauge the tech giant’s interest.

As such, from all the facts in front, there may also be the possibility of the popular gamer-centric app choosing to go public. That is, judging by Discord adding their very first CFO in the form of Tomasz Marcinkowski to bolster their business.

Be that as it may, the news itself is a prospect that has people around the world bubbling with excitement, with Microsoft shares also climbing on since the announcement.

Discord – co-founded by Jason Citron and Stan Vishnevskiy, reportedly boasting 140 million MAUs (monthly active users) and a valuation of $7 billion, maybe attempting to ride the wave of renewed traction towards the app on the back of the pandemic.

The vogue app, used by people (read mostly gamers!) as a service to chat with one another while playing games, has evolved into a hotbed of talk and discussion pertaining to any and every interest which can be indulged in.

Starting from its early days as a gamer-centric platform, Discord has found utility in becoming a haven for study groups, dance classes, book clubs, and other virtual gatherings alike.

Let us take a look at how the app ended up on Microsoft’s radar in the first place, before piecing together Microsoft’s utility for it.

Microsoft Discord: The Acquisition Lane

Judging by their name spring around on any hot commodity or business on the offer, Microsoft has been digging for assets that provide them with a thriving user community to benefit from.

From being one of the front-runners to take over ByteDance’s unicorn TikTok to the chase behind Pinterest Inc., it’s safe to say that Microsoft has been more than willing to take the plunge wherever it has sensed opportunities in the form of massive user bases.

As some of its recent purchases in LinkedIn and GitHub would dictate, Microsoft has kept its focus narrowed on adding online communities.

More relevant to the deal which it now seeks to close with Discord would be Microsoft’s stellar catches of Minecraft’s developer Mojang, ZeniMax and Bethesda Softworks. All these have made Microsoft the holder of some of the most sought after gaming studios in the world, with world-class gaming titles to boot.

And now, with a deal for Discord at the discussion stage, the gamers that could potentially be leveraged by Microsoft is an appealing scenario indeed.

Let us now delve further into hoe Microsoft may attempt to utilize it latest buy (if it happens) with the existing services.

Discord Acquisition: What’s in it for Microsoft

It is the view of many video game industry analysts that the acquisition of Discord would be fruitful for Microsoft, which has kept the investments flowing in its video game units.

Xbox’s business, for starters, has been one that has been burgeoning on the back of an expanding suite of subscription perks it provides as part of its Game Pass offering.

For a company that has been steadily building hardware and bolstering software services, Discord’s acquisition could perfectly weave elements of its envisioned community.

Bundling Discord’s premium offering of Nitro together with Xbox’s Game Pass subscription service is thought enough to drive subscription rates up the roof!  Microsoft has previously entered into an alliance with Discord to link Xbox Live profiles.

Going further, Discord’s buy could also provide a way to capitalize on getting associated with Amazon’s Twitch. All the chat groups and moderators devoted to Twitch streamers can be found on – you guessed it – Discord.

Discord’s buy ties up nicely in terms of a strategic rationale too. From a product fit to competing with rivals, there is the added combination of Discord, Teams, LinkedIn, and Outlook which opens up the door for myriad vistas in the future.

All in all, the way things stand, let’s hope first that the potential acquisition of Discord also doesn’t get added to Microsoft’s “almost-done” list.

The time is certainly ripe for the Redmond-based giant, whose revenue of $43.1 billion in Q2 of FY’21 – ending December 31, 2020 – has much to owe to its gaming services offerings. The overall gaming revenue shot up by 51% in Q2 earnings for Microsoft, garnering $5 billion for the first quarter ever.

There is no denying that from all the numbers and directions that can be analysed, the deal with Discord could be a blockbuster for both sides. Keeping an eye on future updates, let’s not jinx it and see what lies ahead in store for Microsoft.


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